Online Buying: "Eating Up" Your Privacy?

More and more people are doing their shopping online. And marketers have developed sophisticated ways of tracking your tastes and collecting your data. Is this a high tech "cookie" crusade that threatens to crumble your privacy? Or do cookies spark competition with retailers using the information to win your business? On “Power Lunch,” CNBC’s Bill Griffeth moderated a heated debate on this issue.

Before you read any further - note that "Web cookies" are at the heart of the matter. As you might know, cookies are small text files that some Web sites attach to your hard drive while you are Web surfing. A Cookie can contain information such as user ID, user preferences, and it can archive shopping cart information.

Here's the debate:

Jim Davidson, President of Davidson & Company and Executive Director of the Advertising Coalition says people drop cookies on Web sites – because they choose to visit that site.

“The cookie that’s dropped is there because you went there.” He argues when retailers collect cookies, that benefits shoppers. “The information (contained in cookies) is extremely valuable – business can figure out that you like certain things and then make it easier for you to get them. As a consumer it makes you more empowered."

He says collecting cookies is like getting ads in the mail from a department store. Once you shop there – they send you catalogs and coupons to make your next purchase more convenient.

Jeff Chester, Author of "Digital Destiny" and Executive Director of The Center For Digital Democracy disagrees. He said “A vast system has been deployed to collect information about our behavior and preferences, without our consent! The information has one purpose – to be used by business to sell more and increase profits. That’s why it needs to be regulated.